US seeks US$1 bil., prison for AUO executives in LCD case

SAN FRANCISCO -- Prosecutors asked for a US$1 billion fine for Taiwan's AU Optronics and prison terms of 10 years for two top executives in the “most serious price-fixing” case in U.S. history, court documents showed Wednesday.

According to a U.S. government sentencing recommendation filed in federal court, “only these sentences could possibly reflect the seriousness of this offense or provide adequate deterrence.”

The U.S. Justice Department asked for the massive fine to be levied against Taiwan's largest maker of displays for computers, smartphones and other gadgets, for its conviction in a price-fixing scheme for LCD display panels.

It also called for top company executives H.B. Chen and Hui Hsiung to serve 10 years in prison and pay US$1 million fines.

“These defendants and AUO's subsidiary, AU Optronics Corporation America were central figures in the most serious price-fixing cartel ever prosecuted by the United States,” the statement said.

“The correctly and conservatively calculated sentencing guidelines ranges — a corporate fine of US$936 million to US$1.872 billion and prison terms from 121 to 151 months — suggest that these sentences are lenient ones for the offense in this case.”

AU Optronics, along with a Texas-based subsidiary and two former top executives, were convicted on conspiracy charges after a trial in U.S. District Court in San Francisco.

They were charged in a price-fixing conspiracy that brought in more than half a billion dollars in “ill-gotten gains.”

The companies, along with one-time president Chen and former executive vice president Hsiung, took part in a scheme to rig prices of thin film transistor liquid crystal (TFT-LCD) display panels from late 2001 to December in 2006, according to officials.

LCD screens are used in computers, laptops, televisions, smartphones and other gadgets.

Rival LCD makers met in secret at karaoke bars, tea rooms and hotel conference rooms in Taiwan to set prices rather than letting market forces prevail, according to the DOJ.

The jury's finding of US$500 million in ill-gotten gains by Optronics was based on U.S. imports of LCD screens.